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McCurrie McCurrie
& McCurrie, L.L.C.

680 Kearny Avenue
Kearny, NJ 07032-3010
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Make Plans for Return of Estate Tax in 2011

Unless Congress acts soon to change the law (and time is running out!), the federal estate tax will return in 2011 after disappearing for 2010. Not only that, Jersey City estate planning attorneys are warning their clients that the 2011 tax will be tougher than the one those same estate planning lawyers were working with in 2009.

If nothing changes, the 2011 amount that is exempt from estate tax will be $1 million. In 2009 the exemption was $3.5 million. The 2011 tax on the balance will be 55 percent in most cases. It was 45 percent in 2009.

This is the time to consult a professional about how to plan for the contingencies of 1. Dying in 2010, with no estate tax, 2. Dying in 2011 with the anticipated estate tax discussed above, or 3. Dying in 2011 or beyond with a yet-to-be-determined estate tax in effect.

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One way to reduce your tax bill is to reduce the estate. You can give as much as $13,000 a year each to as many people as you like, without paying gift tax. Spouses can combine their gifts and give $26,000 jointly to each of as many people (or trusts) as they would like.

Some experts say Congress will restore the 2009 estate tax. But others speculate that Congress will not act until spring, leaving a gap. What can you do now? Here are a few suggestions:

  • Purchase life insurance
  • If you are widowed, remarry (Not recommended purely for estate planning advantages, but those advantages exist.) 
  • Loan some money to family members (at minimal interest)
  • Use money for a family member's college savings
  • Establish a trust

Source: New York Times "Devising Strategies While the Estate Tax Is in Limbo" 9/15/2010

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